Following the announcement by the Petroleum Products Pricing Regulatory Agency, PPPRA on Wednesday that, with the deregulation of petrol importation, importers will henceforth be permitted to source for their foreign exchange requirements from secondary sources, this has had a negative effect on the naira as it depreciated sharply in the parallel market to about 370 per dollar as of yesterday after two months of stability at 320 per dollar.Investigations revealed that the sharp depreciation resulted from increased demand for dollars and hoarding in anticipation of further depreciation of the naira.
A Bureau De Change Operator who spoke anonymously to Vanguard said:
“With the exchange rate going up, those who have dollars don’t want to sell, expecting the rate to rise further so as to maximise their returns.”
Alhaji Aminu Gwadabe, the President of the Association of Bureaux De Change Operators of Nigeria (ABCON) said this:
“The market has been stable all this while due to drastic reduction in import activities hence demand for dollars by importers reduced sharply. Those who had bought dollars when the rate was high and used it to import were having difficulty selling their goods, hence those who are still importing have reduced. But the announcement yesterday has changed the whole thing. More demand for dollars for petrol importation is expected in the market; meanwhile, there is no supply of dollar. Some people with dollar, especially those who bought when the exchange rate was high, feel the rate is too low for them to sell, hence they are withholding their dollars, waiting for the rate to go higher.”